Acts on retroactive reimbursement for electricity costs and extended payment periods of electricity bills enter into force next week
The acts on the temporary retroactive reimbursement for electricity costs, the extension to payment period of electricity bills and the temporary support to secure the liquidity of electricity companies and other related legislation will enter into force on 6 March 2023. The acts are set to be approved at the presidential session on Friday.
The legislation will help consumers and other clients of retail electricity sellers to pay their electricity bills in a challenging economic situation during the current winter season.
The retroactive reimbursement for electricity costs will be paid per metering point to those end users whose electricity price in their electricity contract exceeds 10 cents per kilowatt-hour, and to those end consumers who have an electricity contract based on spot prices. The reimbursement will be paid automatically to the consumers entitled to it as a deduction to their electricity bill made by the electricity company. The reimbursement does not cover transmission of electricity.
The reimbursement will be paid over four winter months for 50 per cent of the part of consumers’ electricity bills that exceeds the threshold of EUR 90/month. The maximum reimbursement is EUR 700 per month.
The first instalment of the reimbursement, which will be based on electricity consumption in November–December 2022, will be paid in the electricity bill due in April 2023, or the first electricity bill after that. The second instalment will be based on consumption in January 2023 and paid in the following electricity bill. In the second instalment, January consumption will be doubled, which means that the reimbursement will be paid for four months altogether.
The reimbursement will be paid by the retail seller of electricity that supplied the electricity to the end user in November–January. If the end user has changed the retail seller during November–January, the reimbursement will be paid by the sellers in relation to the time they have supplied electricity to the consumer. If the end user has changed the retail seller in a way that prevents the reimbursement from being paid in the electricity bill, the retail seller will pay the reimbursement to the end user as a payment order or to a bank account designated by the end user.
Parliament specified the Government proposal to make the reimbursement available also to consumers referred to in the Consumer Protection Act whose electricity contract has not been identified by a personal identity code in the information systems of electricity trade. The Government proposal would have allowed the reimbursement to be paid only to those customers whose electricity contracts have been identified with a personal identity code.
If the end user and the retail seller disagree on the reimbursement to be paid to the end user, the end user may refer the matter to the Energy Authority. The end user’s complaint must always be processed by the electricity company before the matter is referred to the Energy Authority.
The retail sellers would be compensated for the reimbursements paid from the Budget. As specified by Parliament, the application period of retail sellers for compensation from the State Treasury has been extended until 16 April 2023 for the first instalment of the reimbursement and until 16 June 2023 for the second instalment. The Government decided that the costs of retroactive reimbursement may not exceed ca. EUR 400 million.
Extended payment period of up to 120 days for January–April electricity bills on request
The extension to the payment period for electricity bills will help households and companies to pay their electricity bills of the winter months. At the customer’s request, retail sellers of electricity must extend the payment period of consumption-related electricity bills from 1 January to 30 April 2023. The extension does not apply to transmission of electricity.
Consumer customers will be granted an extended payment period of up to 120 days from the original payment date of the bill. The request to extend the payment period must be submitted before the payment date of the bill. No costs may be charged for extending the payment period and no interest may be charged for the extended payment period.
Businesses may be granted an extended payment period of up to 60 days. The electricity company may charge an annual interest rate of 1.53 per cent from a business for the extended payment period. According to a specification made by Parliament to the proposal, credit institutions and financial institutions are not entitled to an extended payment period.
Extending the payment periods means that the receivables of retail sellers of electricity will be late. Because this may cause a liquidity shortage for the sellers, they may be granted central government guarantees on the bank loans or pension insurance company loans that they have taken to support liquidity.
Two Parliamentary resolutions on preparing for unreasonable energy prices
Parliament requires that the Government monitor and evaluate the functioning of the reimbursement for electricity costs and other forms of support, and take urgent action to help consumers with fixed-term electricity contracts.
Parliament requires that the Government prepare legislative instruments that will be able to respond to an unreasonable rise in energy prices for consumers and SMEs better than the existing support measures in an exceptional market situation. The Ministry of Economic Affairs and Employment should take a lead in advancing such preparation immediately.
Arto Rajala, Senior Ministerial Adviser, Ministry of Economic Affairs and Employment, tel. +358 295 064 828
Petteri Kuuva, Deputy Director-General, Ministry of Economic Affairs and Employment, tel. +358 295 064 819
Energy Authority´s (Energiavirasto) instructions for consumers on electricity reimbursement (questions and answers in Finnish and Swedish)